QUESTION 21 In its first year of operations, Lacasette Company provides its employees three weeks of paid vacation per year. As of December 31, 2016, 27 employees have earned three weeks of vacation time to be taken in 2017. The average weekly salary for these employees is $1,300. Ignoring any tax effects, if the required journal entry on December 31, 2016 is skipped: O Stockholders' equity for 2016 is understated by $70,200 Stockholders' equity for 2016 is understated by $105,300 Net income for 2016 is overstated by $70,200 Total liabilities for 2016 are understated by $105,300 QUESTION 22 A sales tax of 696 is in effect for a company. The company sells a product on credit. The before-tax price of the product is $35,000. The company records both the sales tax and the sales amount in the Sales account at the time of sale. Which of the following are correct if the required adjusting entry is skipped? (1) Equity is understated by $2,100 (ii) Liabilities are understated by $2,100 (iii) Assets are understated by $37.100 (iv) Equity is overstated by $2,100 (v) Liabilities are overstated by $2,100 (vi) Assets are overstated by $37,100 (1) and (iii) (ii) and (iv) (iii) and (v) (iv) and (vi)